A(n) ________ structure separates domestic from international business activities by
creating a separate global branch with its own manager.
A) international area
B) international division
C) global matrix
D) global product
The intentional raising of the value of a currency by a nation’s government is called
________.
A) revaluation
B) securitization
C) fundamental disequilibrium
D) currency hedging
Which of the following is recorded in the capital account of a country’s balance of
payments?
A) income payments
B) income receipts
C) foreign official assets
D) unilateral transfers
A(n) ________ tariff is levied on an imported product and calculated partly as a
percentage of its stated price and partly as a specific fee for each unit.
A) specific
B) compound
C) ad valorem
D) transit
Large international companies tend to make high-level labor decisions at the home
office because ________.
A) it creates a sense of unity and solidarity between the labour unions and management
members
B) managers in the home office are better equipped than managers in the host-country
office, to handle matters that affect workers personally
C) it places decisions that have a direct impact on host-country workers’ lives in the
hands of the home-country experts
D) it gives them greater control over their network of operations around the world
Which of the following would be most appropriate for its products sold through grocery
stores?
A) horizontal integration
B) vertical integration
C) push strategy
D) pull strategy
The first step in the screening process for potential markets and sites is to ________.
A) select a favorable market or site
B) measure the market or site potential
C) identify the basic appeal of a market
D) assess the national business environment
A promotional strategy designed to create buyer demand that will encourage channel
members to stock a company’s product is called a ________.
A) pull strategy
B) push strategy
C) retrenchment strategy
D) stability strategy
Which of the following statements is true of licensing?
A) Licensing restricts finances needed for international expansion.
B) Cross licensing grants a company the right to use a property but does not grant it
sole access to a market.
C) A major advantage of licensing is that it is the least risky method of international
expansion.
D) Licensing increases the likelihood that a licensor’s product will appear on the black
market.
Which of the following is true of distributors?
A) The use of distributors increases the exporter’s control over the price buyers are
charged.
B) They are compensated with a fixed salary plus commissions based on the value of
their sales.
C) They are seldom required to take ownership of the merchandise when it enters their
country.
D) They can stunt the growth of the exporter’s market share by charging very high
prices.
Scenario: Susan Goes Global with Grape Fizz
Susan is the CEO of Grape Fizz, a global drinks-manufacturing company. She wishes to
set up production facilities in other countries and has been advised to assess the
political system of each country before she does so.
Susan also decides not to set up production facilities in Margazo, a country which
functions by a strict set of religious tenets, because some of them contradict her
company’s work policy. Expecting potential employees to break away from these
traditions is not an option since religion plays an important role in the functioning of the
nation. What kind of political system prevails in Margazo?
A) pluralistic
B) theocracy
C) tribal totalitarian
D) democracy
Scenario: Blickinstock at the Crossroads
Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin
America. To that end, Blickinstock is trying to decide whether to purchase an existing
company in a remote region of Argentina or build its own subsidiary. Keith Moon,
Blickinstock’s vice president of global business development, will be making a
presentation to the board outlining the company’s options.
If Blickinstock’s home government tries to stop the company from investing in Latin
America, the government is most likely trying to ________.
A) protect its balance of payments
B) prevent a monopoly situation from occurring
C) discourage the entry of a ‘sunset” company
D) protect the ‘sunset” companies in Latin America